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day trading

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Day Trading is a term used to describe the short term buying and selling of financial instruments on the stock market. The person doing this trading is called a Day Trader and some of the common trading instruments are Stocks, Stock Options, Futures, and Foreign Exchange (also called currency).

The short term trading done by Day Traders usually involves buying and selling throughout the day, sometimes within minutes. And typically several trades will be undertaken throughout the day. It's unusual for Day Traders not to hold positions open overnight, as this can introduce additional risk; however some Traders do allow profits to run longer than a day. Historically, Day Trading was the domain of professional investors and financial institutions, but with the advent of electronic trading systems, Day Trading has become available to individuals (home investors).

The risks associated with Day Trading vary greatly depending on the instrument being traded, the strategy being used and the amount being traded. Successful Day Traders usually have a very clear trading plan that they follow closely, and have good money management skills. Day Traders can use traditional stock brokers, but more often they use an online trading platform that facilitates virtually instantaneous trade execution via the internet.

 

You'll find Day Traders blogging at sites like Paper-Trader.

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